Slashdot Mirror
Student Loan Debt Has Nearly Tripled (npr.org)
An anonymous reader shares a report: Recent college graduates who borrow are leaving school with an average of $34,000 in student loans. That's up from $20,000 just 10 years ago, according to a new analysis from the Federal Reserve Bank of New York. In that report, out this week, the New York Fed took a careful look at the relationship between debt and homeownership. For people aged 30 to 36, the analysis shows having any student debt significantly hurts your chances of buying a home, compared to college graduates with no debt. The cliche of "good debt" notwithstanding, the consequences of borrowing are real, and they are lasting. The report paints a mixed picture of how student borrowing has evolved over the last decade, since the financial crisis. There are some bright spots: For example, student loan defaults peaked five years ago and have declined ever since. And repayment seems to have slowed down among high-balance borrowers -- those who owe $75,000 or more. Meaning, after 10 years, they have paid down only one-quarter to one-third of what they owe.
Disagree. 25% increase in student loans, means 25% increase in revenue for education providers. This is non-trivial growth.
< life story >
I went to a public/private university. Tuition was >40k$ / year. I was able to get 25k in grants and scholarships, but that left me and my parents with a 15k gap.
As my parents had shit credit, they couldn't help co-sign any loans. I had to get an extended family member to help.
After the first year, I couldn't afford it. Flat out.
So I dropped out after one year. No degree. Entered the minimum wage workforce making 8$/hr as a line cook. Worked my way up to Assistant Manager with... $9.50/hr...
Two years later, two shit cars later, and countless roommates later. I lost my job. My father was working as a Project Manager for a nationwide networking company. He helped me land a part time gig that paid 25$/hr but hours ranged from 0 to 30 a week depending on what projects he could help me get on.
But it took nearly 6 months before I was handed that part time gig... I also went to craigslist and worked landscaping when I could, making 10$/hr. However, during the next year, and the flaky hours, I was evicted from my apartment, and I defaulted on my student loans (yes I used all the deferred time (whatever it was really called) I could)... At this time the amount was ~10k.
Before I went into default, I knew exactly how to pay back my debt, I go to a website, enter in the amount, bank account info, done.
A couple years later I found a Software Developer position making ~45k/year. Trying to get my credit back on track, I went to research how to start paying back my debt. This was the most difficult process I could imagine. How can it be that hard to find out who you owe money to?!
A couple months later I finally figured it out, but saw that they charged enough fees for the amount go back up to the original 15k!!!! WHAT?!
Every step of the way in trying to pay back my debt, I stumble on some problem or another. Medical bill, car repair/inspection/registration, roommate leaving without notice leaving me with 2x rent.
</ life story >
I'm am incredibly happy that debtors prison is outlawed, but it seems they have just morphed it into this obscene beast that just eats anyone and everyone dumb enough to fall for this popular fallacy of graduating HS, going to college for 4 years, then landing a job that can help pay back ur debt and life style.
Now, before all you red-wing nuts say "Don't live beyond your means, get a better job, blah blah" I did all of that. Sold my car, rode public transport, lived in a 2 bdrm apartment with 6 other dudes, moved back in with my parents for a while, etc... I did everything I could to save every penny I could... still wasn't enough.
Student debt is today's slavery.
And you know what? Of my group of friends, I'm considered one of the more fortunate ones... Another friend of mine is over 100k$ in debt... And he's currently unemployed.
when we started cutting all the federal funds. They warned about this in the 90s when the cuts started and everybody said it wouldn't matter because salaries would be so high to compensate. Meanwhile we've still got folks spreading the already disproved lies that it's all because of fancy dorms and rich teachers. Yeah, a few nasty little diploma mills were taking advantage of the loan programs. The last administration shut that down. Of course, I'm not expecting the current administration to be so student friendly...
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
While looking at debt of college, ignores the reason for the high costs. Colleges have been raising tuition prices because they know you will qualify for the loan and the loan will be repaid. There is a reason the borrowing has sky rocketed up to 1.3 trillion dollars, colleges are making buckets of money.
An example of alternatives, WGU Governors college was created to provide degrees for working people at a real affordable cost. Most people can buy a 40K car on a 6 year loan, but a 400k school loan, thats stupidly expensive.
The running joke is colleges are now just hedge funds with a college attached. And the money isn't used to lower tuition.
Selling free college is a scam the universities want, they think they will get paid at the same high price, just moving the cost to the government. (aka us the tax payers....)
I didn't even mention the money the sports teams are making also.
Indeed. My dad (born in '43) was able to pay for a Harvard master's degree in the 60's by selling hotdogs... and he's made it abundantly clear that he takes full credit (and then some) for the feat. Good fucking luck achieving that today...
Good for you. Yours is one story, and while you were able to do what you did, I am sure that you can't expect everyone to be able to do that.
In the late 80s I went to Jr College for 2 years, worked to pay my way, then went to University to get my bachelors. I have worked in some form or another since I was 17, all through college, and including summers. I still had to take out loans to make it through college, and I didn't go to an expensive school. After I graduated I wasn't deep in debt, but I was in debt with loans (and no credit card debt). I didn't have any scholarships, and I didn't get a 4.0.
I would love to be able to help my kids with college, but that will start in 7 years and the accounts we have set up and contributed money to will not cover much of anything. And we have planned and saved and are trying to stay out of debt. I can't imagine how other people can just pay for their kids college, and I don't know how college kids can come out without racking up debt these days.
My beliefs do not require that you agree with them.
Yep. Ignorant. Couldn't have valid, differing opinions.. no. The youth are the new fascists, agree or be punched in the face and have your shit lit on fire. Ahh, progress.
At least for a PhD, most people don't pay their own tuition, and even earn a small stipend for the work they do. They either get fellowships, graduate research assistant jobs, or other funding from the professor they do research for. It's not a lot of money, but it's at least "income" rather than "goes out."
Not quality but quantity. In order to make it today you need a degree in America. This means that a lot of people who wouldn't historically would are going to college.
Back 20 or 30 years ago. Having a college degree means something beyond a starting baseline requirement. People could get professional jobs with a high school education. Not the case anymore.
So someone who just wants a decent job will go to college for the paper and not for the education.
We are using colleges as trade schools and not as higher learning.
So a lot more people getting into college means higher cost. Where the demand is exceeding supply creating high costs.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.